Bowen Coking Coal extends suspension of trading in its shares as a hunt for funds goes on

A halt to trading in Bowen Coking’s shares will continue while it attempts to secure ongoing finance as depressed coal prices and a punishing royalty scheme hit hard.

Bowen Coking chief Nick Jorss warns on ‘unsustainable’ royalties.

Bowen Coking Coal’s shares will continue to be suspended from trading as it scrambles to obtain new funding required for it to operate in the increasingly struggling sector.

Bowen Coking, headed by veteran Queensland coal miner Nick Jorss, entered a trading halt on Tuesday at 9.6c a share after saying depressed coal prices and a punishing royalty scheme implemented by the previous Queensland Labor government could force it to temporarily shut its flagship Burton mine west of Mackay. At risk would be 500 jobs.

The company, in a statement to the ASX on Thursday, said the share suspension would remain in place until “it has an update on its forward operational plans and financing solutions”.

“Bowen is currently undertaking a process to review its operational plans at the Burton mine complex due to depressed global coal prices and the unsustainable Queensland state coal royalty regime,” the company said.

“In addition, Bowen continues to explore a range of strategic and financing alternatives, including potential debt, equity, and hybrid solutions, to provide sufficient liquidity for both the near term and foreseeable future.”

Bowen Coking Coal said these efforts included ongoing negotiations with secured lenders, suppliers and creditors, and the Queensland Revenue Office. The company said it continued to operate, produce and export metallurgical coal for its seaborne customers.

Mr Jorss has warned of a wave of coal mine closures across Queensland if the state royalty regime was not wound back.

Bowen opened the Burton mine in 2022 It had a projected 10-year life and annual production of two million tonnes of coal. But the combination of falling coal prices and “the world’s highest royalty rates” meant it may have to be temporarily closed.

Coal Australia’s Stuart Bocking.

Mr Jorss said the company had so far paid $120m in royalties without turning a profit – a situation which was not sustainable. The state government elected last year has so far committed to maintaining the royalty scheme for the next four years.

“There are a lot of mines now under water,” Mr Jorss said. “If you look at how many mines are at risk of closure, it’s a significant portion of the Queensland industry. Some of our largest miners, as I see it, are currently cash negative.

“So it is a warning sign. We’re the canary in the coal mine, unfortunately, because we’re a small Queensland company.”

Bowen closed its Bluff mine near Blackwater in December 2023 due to rising costs.

Coal Australia chief executive Stuart Bocking said the Queensland LNP government’s decision to lock in Labor’s royalty rates through to 2028-29 ignored the “clear damage already inflicted on coal mining communities, the state and most importantly, Queenslanders”.

“Since former treasurer Cameron Dick effectively declared war on Queensland’s coal industry, three mines have shut their doors; a stark warning of what’s to come,” Mr Bocking said.

“With many operations now on a knife’s edge, urgent reform to coal royalties is essential to prevent further closures, protect regional jobs and restore investor confidence in Queensland’s future.”

He said this week’s Queensland budget clearly showed the effects of investor flight and falling global competitiveness, even as coal producers are taxed more heavily.

“Queensland’s mines are battling a perfect storm of declining prices, rising costs and punishing tax settings that no other coal-producing jurisdiction in the world comes close to imposing,” he said.

“This week’s state budget missed a critical opportunity to ease pressure on the state’s resources sector, instead doubling down on the world’s highest coal royalty regime – a policy that threatens to fast-track mine closures.”

Originally published as Bowen Coking Coal extends suspension of trading in its shares as a hunt for funds goes on